Hundreds of workers who believed they had a ‘bootiful’ retirement in store have had their hopes dashed by the sale of their poultry firm employer.
They are part of the 2,000 strong workforce of Bernard Matthews, Europe’s largest turkey farmer.
The firm was bought in 2013 by Rutland Partners, which also owns electronic brand Maplins and popular restaurant chain Pizza Hut after Matthews died in 2010, aged 80, after garnering a £300 million fortune from the business.
Rutland has now sold the Bernard Matthews brand to Ranjit Boparan, a private investor behind Harry Ramsden’s fish restaurants and Goodfella’s pizza.
But MP and chair of Parliament’s work and pensions committee Frank Field is challenging the sale after news leaked that the deal involves a pre-pack administration.
£16 million black hole
The move would see responsibility for the Bernard Matthews pension scheme shift to the government’s Pension Protection Fund with an instant cut in retirement benefits for workers. The pension has a £16 million black hole.
“The new employer must not be allowed to get away with dumping the Bernard Matthews pension into which workers have paid,” said Field.
“The Pensions Regulator needs to act robustly and quickly to stop such activities being mimicked by other buyers wishing to dump pension liabilities.
“We cannot have firms changing ownership at the price of pensions being dumped with the Pension Protection Fund – such dumping involves promises being broken and the cuts in benefit that result.”
Pensions safeguarded by the PPF typically see a 10% cut in benefits and a cap on annual pay-outs linked to age.
QROPS exit plan
A 60-year-old has an annual PPF pay-out limit of £32,276 regardless of the amount they have saved into the fund.
Thousands of workers are paid pensions at a reduced rate by the PPF.
The latest scheme to go into protection is the British Home Stores pension.
Expats who fear their pension savings will be sucked in to the PPF can look at a Qualifying Recognised Overseas Pension Scheme (QROPS) to supply a solution.
Final salary and direct contribution workplace pensions can be transferred into a QROPS which then pays out in retirement according to investment performance.
Pension rules allow QROPS to pay up to a 30% tax-free lump sum compared to a maximum 25% offered by a UK onshore pension. QROPS can also offer better estate planning protection for unspent pension funds than many workplace schemes.